Analysis: “Cipollone doctrine” revived

Posted Tue, December 16th, 2008 1:17 pm by Lyle Denniston

Analysis

For l6 years, lower federal courts have labored over the right way to apply a significant Supreme Court ruling on consumers’ right to sue in state courts to challenge corporate wrongdoing, when the companies involved insist they are insulated by federal law. The problem, those judges found, was that no one could be sure just what the main opinion meant, and, besides, that opinion represented the views of only four Justices. Now, that 1992 opinion has gained majority support, so five Justices appear to accept that it says what it needs to say.

The decision at issue is Cipollone v. Liggett Group — for years, the Court’s most significant ruling on smokers’ lawsuits against cigarette manufacturers. Cipollone‘s revival — indeed, its conversion into majority-endorsed doctrine — came on Monday in the Justices’ 5-4 ruling in Altria Group, et al., v. Good, et al. (07-562), another case involving smokers’ legal rights.

On the surface, Cipollone was a 7-2 ruling, but actually the vote lineup was 4-3-2, with the four votes grouped together controlling the reasoning. There are two facets to that reasoning, and both of them apparently now represent the views of five Justices — an undeniable majority.

One of these rationales is important in a general sense, applying to any kind of case in which makers of consumer goods or providers of consumer services claim that state lawsuits against them cannot go forward because they have been displaced (technically, “preempted”) by federal law. The other rationale is more vital to cases involving smokers’ court cases against tobacco companies.

The more general “Cipollone doctrine” is that clauses in federal laws that “preempt” enforcement of similar or parallel state laws are to be given a “narrow reading.” And that notion relies, in part, on an even broader doctrine: there is a “presumption” that Congress did not intend to displace state remedies for business-caused harms, so the burden is on business to overcome that presumption and show that Congress clearly intended to foreclose a state remedy.

The second doctrine, for use in tobacco cases, is a somewhat clumsily worded phrase. It was supposed to guide lower courts in deciding whether a smokers’ lawsuit can go forward. The judge is to look at Congress’ cigarette labeling law, first enacted in 1965, and then look at the specific complaint in the smokers’ lawsuit, and compare the two.

If the lawsuit would result in imposing a new duty on cigarette companies that would compel them to say something — or not say something — in their ads or marketing about the health hazards of smoking, the lawsuit is blocked because that is the ground that has been taken over by the federal labeling law.

But if the legal duty that would emerge out of the lawsuit is something else, a broader legal obligtion detached at least in theory from claims about smoking and health, the lawsuit may proceed.

Applying the two rationales in Cipollone, Justice John Paul Stevens’ opinion for himself and three others ruled that smokers’ lawsuits cannot go forward if they claim that the tobacco companies did not warn them, in their marketing, about how unhealthy it is to smoke cigarettes. But the Court also ruled that, if the manufacturers’ marketing was an attempt to deceive by misrepresenting or leaving out key facts about their products — in a word, “fraud” on the consumer, the lawsuit is allowed.

Justice Stevens, also the author of Monday’s ruling in the Altria Group case, applied some of each rationale in concluding that three Maine residents could go ahead with their class-action lawsuit claiming that Philip Morris USA deceived them, under Maine consumer-proteciton law, by describing reduced-nicotine cigarettes as being “light” or “lower in tar and nicotine.” Some 40 similar lawsuits pending in an array of other states also presumably can proceed. Those lawsuits, lawyers for tobacco companies say, seek billions of dollars in damages.

Stevens again rccited the broad doctrine that federal preemption laws are to be interpreted narrowly and that Congress must speak clearly if it means to head off state remedies, and he again relied upon the notion that lawsuits claiming fraud or deception by tobacco companies are not directly tied to smoking and health.

This time, Stevens gathered the votes of Justices Stephen G. Breyer, Ruth Bader Ginsburg, Anthony M. Kennedy and David H. Souter to support his opinion.

Recognizing the clumsiness of the Cipollone formulation allowing fraud claims to proceed in smokers’ cases, Stevens said: “While we again acknowledge that our analysis of these claims may lack ‘theoretical elegance,’ we remain persuaded that it represents ‘a fair understanding of congressional purpose.’ “ (The quoted material is from Stevens’ Cipollone opinion.)

This majority combination led to a doubling of the dissenting corps on tobacco lawsuits. Justices Antonin Scalia and Clarence Thomas, who had dissented in Cipollone 16 years ago, were joined on Monday by Chief Justice John G. Roberts, Jr., and Justice Samuel A. Alito, Jr.

Justice Thomas, who wrote the dissent for the four of them. protested most strenuously about the revival of the concept that federal preemption clauses are to be interpreted narrowly. He said the Court’s more recent rulings in consumer lawsuits have walked away from that presumption, and he suggested that the majority’s embrace was so lukewarm that its defense of Cipollone’s “confusing test is confined to one sentence and a footnote.”

However, since Justice Thomas so rigorously challenged the presumption and called explicitly for Cipollone’s test to be overturned, it is clear that this was a main point of discussion among the Justices in their deliberations on Altria Group, and yet Stevens assembled a majority to hold on to the test.

Thomas went on to challenge Stevens on the application of that test in this particular case. The smokers were contending that they were deceived because Philip Morris had not acknowledged that it knew smokers of “light” cigarettes would actually find ways to smoke those cigarettes that overcame the benefits of lower tax and nicotine content.

That, Thomas wrote, means that Philip Morris’ alleged misrepresentations had an effect on the smokers that was directly related to the health risk of smoking — precisely what federal labeling law covers.

Upcoming Oral Arguments

3/31Kimble v. Marvel Enterprises, Inc. Whether the Court should overrule Brulotte v. Thys Co., which held that “a patentee’s use of a royalty agreement that projects beyond the expiration date of the patent is unlawful per se”.

4/20Johnson v. United States Whether possession of a short-barreled shotgun is a violent felony, leading to a longer prison term as a career criminal.

4/21McFadden v. United States A federal prosecutor’s duty to prove that a suspect knew that a substance was an illegal substitute for a banned drug.

4/22Horne v. Department of Agriculture The federal government’s duty to pay raisin growers for an order requiring removal of part of a year’s crop from the market to stabilize prices.

On Monday afternoon Justices Anthony Kennedy and Stephen Breyer testified before the House Appropriations Committee. The purpose of the hearing was to discuss the Court’s budget for the next fiscal year and the federal judiciary, but the legislators also took full advantage of the occasion to touch on other topics as well.